Target pensioners' family home: think tank

The federal government is being urged to target the family homes of pensioners for budget savings.

The Centre For Independent Studies argues it's unfair that rich and poor are being treated the same.

It claims its controversial proposal will leave an overwhelming majority of pensioners better off.

Under its proposition, the family home will be included in the assets test for age pension eligibility, and seniors encouraged to unlock the value of their property and use it to support themselves in retirement.

The reverse mortgage system would generate $14 billion in yearly savings, with almost half of those on the full pension moving onto the part-rate, while many others would no longer get support.

However, the centre says nearly all pensioners will benefit as their incomes rise by an average of $5900 a year under its proposal.

Only a small percentage of people will see diminished incomes of just $864.